Westpac increases home loan and deposit rates
12 November 2010
- Westpac’s standard variable home loan rate to increase by 0.35%
- A special new fixed rate discount offer of 0.40% off Westpac’s three year fixed loan as part of its Premier Advantage Package
- Deposits to increase by at least 0.25% on a range of accounts
Westpac today announced it was increasing its standard variable home lending rate by 0.35% to 7.86% per annum, effective 16 November 2010.
Depositors and Savers
Westpac will continue to provide competitive deposit rates for customers by passing on rate increases of at least 0.25% on a range of accounts.
Standard Variable Rate
Following the 0.35% rate rise, repayments on the average $250,000 household mortgage will increase by approximately $56 per month.
Commenting on the change in Westpac’s standard variable lending rate, Group Executive, Westpac Retail & Business Banking, Rob Coombe said: “This was a very difficult decision brought upon us by average funding costs that continue to rise, and was only made after the most careful consideration.
“The Global Financial Crisis (GFC) has changed the structure of funding markets. Offshore wholesale funding is now materially more expensive and deposit funding is even more critical and competitive. While our customers benefit from significantly increased deposit rates, this has contributed to an increase in our overall funding costs.
“As we disclosed at our recent earnings result, higher funding costs have resulted in the interest margin in the Westpac Retail & Business Banking division declining 0.19% compared to the previous 12 months, and 0.13% in the six months to September 2010.
“In this context, our interest rate decision has not been taken lightly. We have carefully balanced the varied interests of all our stakeholders – depositors, home loan customers, shareholders and staff, recognising our obligation to those stakeholders to run a sustainable bank.
“We do understand the impact higher borrowing rates can have, and are committed to helping our customers with competitive packages that meet their financial needs. We also work proactively with those customers experiencing financial difficulty and have a range of options to assist specific needs.”
Mr Coombe encouraged all Westpac customers to contact their local Bank Manager to examine the range of home loan options available to them.
“Our standard variable rate is our reference rate. We can help our customers look at all options available to them including our discounted Premier Advantage Package and our new special fixed rate home loan, as well as considering splitting their mortgage between fixed and variable rates,” he said.
Special three year fixed rate loan
Westpac will offer a special discount of 0.40% off its three year fixed rate loan as part of its Premier Advantage Package. This special new three year fixed-rate home loan rate of 7.09% will assist new and existing customers who want certainty on their mortgage repayments.
Customers facing financial difficulty in relation to their Westpac accounts are encouraged to contact Westpac Assist on 1800 067 497. “Over the last 12 months our Westpac Assist team has helped many customers to better manage their household budgets,” Mr Coombe concluded.